Small Business

When Disease Hits a Small Farm

After one of his herd tested positive for TB, a Michigan farmer found himself in a bureaucratic tangle that may put him out of business

When federal and state agriculture regulators learn of a potential farm disease outbreak, they quickly move in to isolate it by slaughtering not only diseased animals, but other animals that may have been exposed to the diseased animals, and quarantining the affected farms. Just such a containment process is currently under way in Britain to contain Avian flu in turkeys (see BusinessWeek.com, 2/5/07, "Bird Flu Outbreak Rattles Britain"). And recently gaining attention is a two-year-old USDA program called the National Animal Identification System (NAIS), under which approximately 500 million-plus farm animals are to be identified via special digital tags, with the goal of speeding up the disease-identification/containment process.

It all sounds pretty straightforward. But how does the containment process work in practice?

Doug Kirkpatrick, who sells beef, turkey, chicken, and pork direct to consumers from his 160-acre farm in the small western Michigan town of Herron, knows exactly how it works, thanks to an outbreak of bovine tuberculosis in one of his cows in late 2005. The glimpse he offers into the realities of containing farm disease isn't one to inspire confidence among owners of small farms.

Debra Eschmeyer, program director for the National Family Farm Coalition, a Washington-based organization, says some farmers worry that NAIS could be misused by the government to quarantine more farms and slaughter more animals than necessary, wreaking financial havoc on these businesses. "Everything is going to be available on one central database. It's easy to see it being abused…. The small farmer is oftentimes the easy target" for regulators, she adds.

Downward Spiral

Kirkpatrick is a case in point. His cow and pig herds have been destroyed, but he still awaits government approval to resume farming—a one-year delay that has put his business on the brink of collapse.

His troubles began in late October, 2005, when a dozen of his 55 cattle tested positive for bovine tuberculosis in a required annual test by the Michigan Department of Agriculture (MDA). This isn't an unusual occurrence. Deer routinely expose cows to the disease and the vast majority tested further turn out not to actually have the disease. But having even a single cow test positive is enough to warrant a quarantine of the farm until tests eventually exonerate the exposed animals. Unfortunately for Kirkpatrick, further testing over the next few weeks determined that one heifer possibly had TB, and that sent Kirkpatrick's farm into a downward spiral.

Regulators seized that animal in mid-November, and paid Kirkpatrick market value. But they also continued the quarantine of his farm, which meant he couldn't buy or sell any animals, and ordered more sophisticated tests to confirm for certain that the heifer had TB. When the test came back positive in early December, regulators gave a further order: destroy the entire herd of 55 cattle, along with Kirkpatrick's prized herd of 16 purebred Berkshire hogs. (Neither MDA nor USDA officials would discuss the specifics of Kirkpatrick's case, citing confidentiality and privacy restrictions.)

"Emotionally Awful"

Before the animals were confiscated, Kirkpatrick had the opportunity to negotiate compensation with a certified livestock appraiser assigned by the USDA. Though his leverage was minimal, Kirkpatrick figures he received pretty close to fair market value—nearly $56,000 for 47 cattle and 10 pigs (see BusinessWeek.com, 2/8/07, "What's in the Stew?"). (He was allowed to slaughter the remaining cattle and pigs for his own use.) And the regulators determined his 220 chickens and 240 turkeys weren't in danger of contracting TB, so would escape slaughter.

What may seem a simple process was in fact full of problems for Kirkpatrick, 56, who has owned the farm for 10 years since making "a mid-life change," leaving a career in construction to pursue his passion for farming.

For one thing, during the approximately 100 days between when the farm was quarantined in late October, 2005, and the animals taken in mid-February, 2006, Kirkpatrick was responsible for feeding and caring for animals he knew were condemned. He figures his cost for food alone at $70 per day, or more than $7,000. "That's just my out-of-pocket cost—it doesn't include things like maintaining tractors, and fuel to run the tractors." Equally unsettling, "You're working with animals you know are going to die very soon. It's very difficult, emotionally awful," he says.

Endless Negotiation

Even more difficult times lay ahead, after the animals were seized last Feb. 14. In order to resume farming, he needed two things from the MDA and USDA. First, he needed to convince them he had adequately de-contaminated his farm, to guard against a recurrence of TB. The process of completely cleaning and power washing all his equipment and feeders, and having everything disinfected to the state's satisfaction, took more than four months, until late June, 2006.

Once that step was completed, he needed to obtain approval of "a herd plan"—a highly detailed plan for management of his farm, such as how equipment would be arranged and where animals would be housed and fed—to govern re-launch of his operations. While that might seem to be just a matter of mastering the right legalese to satisfy regulators, it's actually a complex negotiating process, since the terms govern how his farm will be run. According to a USDA spokesperson, herd plans are "designed to prevent reinfection of herds and prevent spread of disease. Each herd plan is going to be unique…and each herd plan is tailored to the needs of the property."

For Kirkpatrick, the goal was to keep the herd plan from being so restrictive he couldn't help but violate it, for a very simple reason: Should there be another outbreak of disease, and regulators determine any violations in the herd plan, they can deny the owner compensation for animals that have to be destroyed.

Long-Distance Experts

For example, the herd plan proposed by the regulators prohibited any "standing water" and rodents. But, wondered Kirkpatrick, "is a mud puddle standing water?" Also, "If you own a farm, you know rodents are a problem. You can't keep mice out of hay stored outside." Originally, the regulators proposed he do all his winter feeding of animals within 50 feet of his barn. He argued this was impractical, and after months of discussion, the regulators agreed to allow the feeding to extend out as far as 100 yards.

The negotiations dragged on through the fall and early winter. "The problem is that you're working this out with people who have never owned a farm, or, in some cases, even been on a farm," says Kirkpatrick. "They want a say in where you put your animals when. I'm saying you can't make that decision from Washington, D.C."

In the meantime, Kirkpatrick's business has been decimated. For one thing, the $56,000 in compensation he received for the slaughtered cattle and pigs—"my pot of gold," as Kirkpatrick puts it—is more than half gone, spent on the fixed expenses associated with keeping the farm going. "I lost 55 cows. I'll be lucky if I have enough to buy 22 animals," he says.

Physical Toll

And his dozens of customers from around Michigan, who prized his grass-fed meat and free-range poultry, have pretty much deserted him. "I figured I would either keep 80% of my customers, or 20%," he says. Unfortunately, it turned out to be 20%. Kirkpatrick understands his customers' concerns. "We communicated with customers via our newsletter, telling them our chickens and turkeys weren't affected by any of this." Yet sales plunged. He had projected $90,000 of sales last year, and wound up with only $15,000. Kirkpatrick says he was only saved from losing the farm by tapping into the salary from his wife's teaching job at a local community college.

The business problems have created nearly unbearable stress for Kirkpatrick. His blood pressure has soared, and he has experienced chest pains and terrible insomnia. Kirkpatrick says his physician "advised me to sell the farm and get out of the business. He says my health can't take it."

But he has decided to give the business another shot, especially now that he's close, possibly only weeks away, from completing negotiations on the herd plan. Still, he figures that even if he is up and running again soon, it will take him three or four years to get the business back to where it was when the first positive TB test came back in October, 2005.

While he has learned important lessons about what to expect from the government in the event of a disease outbreak, he says most farmers have no idea what might be in store. Clearly, it costs much more and takes much longer to fix than any farmer might imagine. Moreover, there isn't necessarily a lot of logic behind the process. "A lot of this just doesn't make any sense," sighs Kirkpatrick.